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Mercari Inc (JP:4385)
:4385
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Mercari
(4385)
Select Model
Select Model
Rating:73Outperform
Price Target:
¥3,269.00
▲(11.49% Upside)
Mercari's strong financial performance, particularly in profitability and growth, is a major positive factor. The technical analysis supports a bullish outlook, though caution is advised due to potential overbought conditions. Valuation is reasonable, but the lack of a dividend yield may deter some investors. Overall, the stock presents a solid investment opportunity with some risks to monitor.
Positive Factors
Revenue Growth
Consistent revenue growth indicates Mercari's ability to expand its market presence and enhance product adoption, supporting long-term business sustainability.
Profitability
High profitability margins reflect Mercari's efficient operations and strong market position, allowing for reinvestment in growth and innovation.
Effective Use of Equity
A high return on equity suggests that Mercari is effectively using its shareholders' investments to generate earnings, enhancing shareholder value.
Negative Factors
High Leverage
High leverage can increase financial risk, potentially limiting Mercari's ability to invest in growth and weather economic downturns.
Negative Cash Flow Trends
Negative cash flow trends indicate potential liquidity issues, which could constrain Mercari's operational flexibility and investment capacity.
Liquidity Challenges
Difficulty in converting income to cash can impact Mercari's ability to meet short-term obligations and fund strategic initiatives.
Mercari (4385) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥483.12B
Dividend YieldN/A
Average Volume (3M)3.05M
Price to Earnings (P/E)17.2
Beta (1Y)0.58
Revenue Growth4.83%
EPS Growth106.29%
CountryJP
Employees2,080
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)30.30
Shares Outstanding164,773,620
10 Day Avg. Volume3,724,380
30 Day Avg. Volume3,051,140
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)4.42
Price to Sales (P/S)2.28
P/FCF Ratio-35.84
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥2,400.00Price Target Upside-18.14% Downside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Mercari Business Overview & Revenue Model
Company DescriptionMercari, Inc. (4385) is a Japanese e-commerce company that operates a popular online marketplace where individuals can buy and sell new and used items directly with each other. Founded in 2013, Mercari has established itself as a leading platform in the consumer-to-consumer (C2C) sector, providing a simple and user-friendly mobile app that facilitates transactions across various categories including fashion, electronics, home goods, and more. The company aims to create a seamless trading experience by offering features such as secure payment processing and shipping options.
How the Company Makes MoneyMercari generates revenue primarily through transaction fees charged on sales made through its platform. When a seller lists an item and successfully sells it, Mercari takes a percentage of the sale price as a fee, which typically ranges from 10% to 20%. Additionally, the company earns revenue from optional services such as promoted listings that help sellers increase the visibility of their products. Mercari also benefits from partnerships with shipping companies that facilitate faster delivery options, enhancing the user experience and encouraging more transactions. The combination of these revenue streams allows Mercari to sustain its operations and invest in further growth and development of its marketplace.
Mercari Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Feb 09, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements in profitability and technological integration, particularly in the Fintech and cross-border transactions segments. However, there are notable challenges with revenue growth and GMV, especially in the Marketplace and U.S. segments, indicating areas for improvement.Q4-2025 Updates
Positive Updates
Record High Core Operating Profit
Core operating profit reached JPY 27.5 billion, significantly exceeding the forecast, representing a 46% year-on-year growth.
Profitability Across All Segments
All three business segments, Marketplace, Fintech, and U.S., achieved full-year profitability for the first time.
Fintech Segment Growth
Fintech core operating profit significantly exceeded the initial target, ending at JPY 4.5 billion, with a year-on-year credit balance growth of 32%.
AI Integration Success
AI now generates 70% of code related to product development, leading to a 64% year-over-year increase in development output per engineer.
Cross-Border Transaction Growth
Cross-border transaction GMV exceeded JPY 90 billion, marking a 15-fold increase since FY 2022, now accounting for approximately 8% of total Marketplace GMV.
Negative Updates
Revenue Growth Challenges
Revenue came in at JPY 192.6 billion, falling short of the forecast due to a slowdown in the growth of the marketplace and U.S. businesses, with a 3% increase year-on-year.
Marketplace GMV Growth Below Target
Marketplace GMV growth rate was 4% year-on-year, falling short of the 10% target, largely due to the impact of fraudulent activity.
U.S. Revenue Decline
U.S. GMV and revenue have been on a downward trend over the last three years, despite achieving first full-year profitability.
Company Guidance
During Mercari's FY 2025 Full Year Financial Results Presentation, key performance metrics were highlighted. The company reported a core operating profit of JPY 27.5 billion, surpassing forecasts, with a revenue of JPY 192.6 billion, which, despite being below expectations, still marked a record high. The marketplace, Fintech, and U.S. segments all achieved profitability for the first time, with cross-border transaction GMV over JPY 90 billion and Mercard issuances exceeding 5 million. Looking forward to FY 2026, Mercari anticipates revenue growth of 4% to 9%, aiming for a core operating profit between JPY 28 billion and JPY 32 billion. The company plans to invest in AI and capitalize on its credit business, targeting a CAGR of over 25% in core operating profit compared to FY 2024. Additionally, the Fintech segment saw a significant core operating profit rise to JPY 4.5 billion, driven by a 32% growth in the credit balance. The U.S. business also achieved profitability with a JPY 900 million operating profit. Mercari continues to focus on being an AI-native company, enhancing user experiences, and strengthening its product offerings across all segments.Mercari Financial Statement Overview
Summary
Mercari shows strong revenue growth and improved profitability margins. However, high leverage and negative cash flows pose significant financial risks.Income Statement
Mercari has demonstrated consistent revenue growth over the years, with a notable increase in revenue from 2024 to 2025. The gross profit margin remains strong, indicating efficient cost management. However, the net profit margin has shown volatility, reflecting fluctuations in profitability. The EBIT and EBITDA margins have improved, suggesting better operational efficiency.85
Very Positive
Balance Sheet
The company's debt-to-equity ratio is relatively high, indicating significant leverage, which could pose financial risks. However, the return on equity has improved, showcasing better utilization of shareholder funds. The equity ratio is stable, reflecting a balanced asset structure.70
Positive
Cash Flow
Mercari's cash flow situation is concerning, with negative operating and free cash flows in recent years. The free cash flow growth rate has been negative, indicating challenges in generating cash. The operating cash flow to net income ratio is also negative, highlighting potential liquidity issues.60
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 197.15B | 192.63B | 187.41B | 171.97B | 147.05B | 106.11B |
| Gross Profit | 142.87B | 138.26B | 129.73B | 114.42B | 95.14B | 81.80B |
| EBITDA | 35.03B | 31.62B | 20.42B | 19.63B | -3.04B | 13.06B |
| Net Income | 28.17B | 26.11B | 13.46B | 13.11B | -7.57B | 5.72B |
Balance Sheet | ||||||
| Total Assets | 556.79B | 543.76B | 501.77B | 415.29B | 339.86B | 262.53B |
| Cash, Cash Equivalents and Short-Term Investments | 148.56B | 147.03B | 197.31B | 204.73B | 218.85B | 171.46B |
| Total Debt | 203.87B | 199.38B | 193.31B | 160.55B | 131.35B | 71.15B |
| Total Liabilities | 451.63B | 444.12B | 429.63B | 360.06B | 301.87B | 222.52B |
| Stockholders Equity | 104.81B | 99.27B | 71.84B | 55.35B | 37.68B | 39.63B |
Cash Flow | ||||||
| Free Cash Flow | 14.60B | -12.25B | -43.49B | -36.40B | -26.89B | 2.95B |
| Operating Cash Flow | 14.93B | -11.95B | -43.34B | -35.82B | -26.22B | 3.37B |
| Investing Cash Flow | -52.72B | -31.36B | -877.00M | -601.00M | -671.00M | 6.91B |
| Financing Cash Flow | 23.32B | 504.00M | 32.09B | 25.17B | 62.06B | 19.77B |
Mercari Technical Analysis
Positive
2932.00
Price Trends
2524.95
Positive
2414.67
Positive
2422.24
Positive
Market Momentum
134.83
Negative
65.05
Neutral
53.32
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4385, the sentiment is Positive. The current price of 2932 is above the 20-day moving average (MA) of 2775.03, above the 50-day MA of 2524.95, and above the 200-day MA of 2422.24, indicating a bullish trend. The MACD of 134.83 indicates Negative momentum. The RSI at 65.05 is Neutral, neither overbought nor oversold. The STOCH value of 53.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4385.
Mercari Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | ¥131.60B | 25.73 | ― | 0.71% | 57.01% | 91.03% | |
73 Outperform | ¥483.12B | 17.19 | 31.11% | ― | 4.83% | 106.29% | |
69 Neutral | ¥1.18T | 38.13 | 28.71% | 1.05% | 14.16% | 26.13% | |
69 Neutral | ¥98.48B | 16.85 | ― | 2.32% | 22.22% | 26.29% | |
67 Neutral | ¥1.20T | 26.64 | 47.74% | 2.80% | 6.80% | 0.62% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
53 Neutral | ¥2.03T | -12.41 | -21.14% | ― | 11.45% | 42.34% |
* Consumer Cyclical Sector Average
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Mercari Corporate Events
Mercari Reports Strong Q3 2025 Financial Results
Nov 7, 2025
Mercari, Inc. reported strong financial results for the three months ended September 30, 2025, with a notable increase in revenue and profits compared to the previous year. The company’s revenue grew by 10.1%, and operating profit more than doubled, reflecting a robust performance in its core operations. This financial growth indicates a positive trajectory for Mercari, enhancing its position in the e-commerce market and potentially benefiting stakeholders.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.